Self-managed super funds can be a rewarding way to save for retirement. But every SMSF trustee has a role and responsibilities they must understand and meet. Professionals can prepare the accounts and give guidance, but only the trustees can make the fund's decisions.
Here are six parts of a trustee's role.
1. Run the fund
Running the fund is your main responsibility, and many new trustees underestimate it. Check how the fund is doing regularly, review its investment strategy, and make sure every decision is recorded.
2. Meet its costs
The fund pays its own running costs, including the yearly audit by an approved SMSF auditor and the ATO's supervisory levy. Make sure it has enough cash to do so. It also helps to keep learning about the rules and about investing, from your adviser and other professionals.
3. Stay in control
You are responsible for the fund's assets. Keep them in the fund's name and separate from your own. Wise decisions made now can protect members later, even through personal or financial difficulty.
4. Understand your fund
You don't need to be a financial expert, but you do need to understand how the fund is set up, run and audited. Get help from professionals, give them the right documents and follow their guidance. Keep the fund's records for as long as the law requires: generally five years for accounting records and returns, and ten years for minutes and trustee declarations.
5. Keep contributing
Most members keep contributing to their fund every year. The rules and caps change, so check the ATO's current contribution caps, but your role as trustee stays the same. Each year you learn, and become a better trustee.
6. Grow the fund
Spreading the fund's money across different investments, such as property, shares, fixed interest and cash, reduces the risk of losses and helps the fund grow over the years. That is the purpose behind every trustee decision: to provide for members' retirement.
If you're a trustee, your accountant or financial planner can help you with each of these.